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Month: September 2019

by Jacqui Brauman Jacqui Brauman No Comments

Lending Money to Friends and Family

While you want to be generous in good times, and help a friend or family member out when you can, unfortunately money can ruin relationships.

If you’re lending money to a friend or family, they are probably going to consider it a gift. Or at very least, not think that paying you back is a priority. It will only happen when they end up with some extra money (which is usually never).

But they’re legally right to think the money is a gift. 

lending money

It comes back to contract law, and that two people entering into an agreement need to intend that it is legally binding. Friends and family members don’t usually think an agreement between them is legally binding – they think of it as a lesser obligation.

So what do you do, if you want to get paid back?

If you lend money to friends or family, you need the agreement to be put down in writing, and for both of you to sign it. Without this, the money will be considered a gift, and you will have no legal grounds to try to get it back.

When the arrangement is in writing, it confirms that you both did what the agreement to be legally binding, rather than just a gift.

What needs to be in the agreement?

The written agreement can be simple, but needs to be clear. You are at least going to include:

  • the name of the person lending the money (your name)
  • the name of the person getting the money
  • how much money
  • maybe, what they are using it for
  • when they need to pay it back by
  • whether they are going to pay some instalments
  • the interest rate, if you want to charge interest
  • the date
  • both need to sign.

What do you do if they don’t pay the money back?

Just like a personal loan, you would be able to sue them for the money. But this is a bit extreme, so what options do you have first?

Well, you could talk to them first, and agree to extend the loan, if they need more time. You would have to have a written agreement of the extension.

You might be able to change the terms of the payment. Maybe they have a house that they will sell in a couple of years, or something else of value. If they agree that you can get paid when the house or the thing sells, ask them if you can put a caveat or charge on the property. 

A caveat on real estate, or a charge on personal property, makes sure it cannot be sold without you knowing. And if you know they’re selling it, then you won’t agree to removing your caveat or charge unless you are paid. 

You could also consider using a dispute resolution service. This might be free or paid mediation. Or instead of making a claim in court, you could make a small claim in your State Civil and Administrative Tribunal which can be far cheaper and easier. 

So if you’re lending money to a friend or family member, then make sure to have the agreement noted down on paper, and have them sign it.

by Jacqui Brauman Jacqui Brauman No Comments

I’m getting separated – where do I start?

I’m getting separated – where do I start?

Your marriage is nearly over, or you’ve just left or kicked him out. So you’re getting separated – where do you start?

Your first priority should always be to make sure you are safe. If you’re not, go to the police, and get the support that you need.

Being separated also means having independent finances, so make sure you have your own bank account and your wages are being paid into that. 

separated

Neither of you should clean out any joint accounts and leave each other with nothing. If this does happen, the money will still be taken back into account later, and potentially so will the behaviour.

Divorce

You do not need to get divorced straight away. If fact, you can’t get divorced until you’ve been separated for 12 months.

After being safe, your next priority will depend on whether you just need a financial settlement with your ex-partner, or whether you still have young children. 

Trying to come to an agreement about everything should always be the first step. But it’s hard to come to an agreement when you don’t know what your rights are. 

Here are some videos to start learning your rights.

You may also want an initial, one-off appointment for advice from a lawyer. There should be no ongoing obligation.

Children

If you have children your next step is to contact a Family Dispute Resolution centre to have a mediation. Quite often, parents reach an agreement this way, and then they need to put that agreement into an enforceable format, such as Consent Orders (which a lawyer can help you with).

If you cannot come to an agreement through mediation with the Family Dispute Resolution centre, then you will be given a certificate to confirm that you have tried. Without this certificate, you cannot make an application to Court.

Court should be your last option, but sometimes it is necessary to force the other party to negotiate, or to force the other party to give you full disclosure of all their financial affairs. Even if you end up in Court, the majority of matters settle without a trial. But the road in Court can still be long and expensive.

There are also other avenues to formalise an agreement that you and your ex-partner reach, such as a Binding Financial Agreement.

Or there are also other ways to try to reach an agreement, if the Family Dispute Resolution centre doesn’t work, such as a Divorce Coach. 

Utilise whatever resources you can that are suitable for your situation. 

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